Denesoline Corp. claims Tlicho mismanaged Ventures West by giving chiefs' family members high level positions

Ventures West is 90 per cent owned by the Tlicho Investment Corporation and 10 per cent owned by Denesoline Corporation. Denesoline is suing the Tlicho Investment Corporation, alleging that its mismanagement of the company has cost it hundreds of thousands of dollars. (Hilary Bird/CBC)

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The Tlicho Investment Corporation is fighting back against allegations that it is mismanaging a transportation company it co-owns with the business arm of the Lutsel K'e Dene First Nation.

In July, Denesoline Corporation launched a civil lawsuit against the Tlicho Investment Corporation for allegedly mismanaging Ventures West — the Alberta-based transport company the two groups co-own — by giving family members of Tlicho chiefs high level positions at the company, even though they were unqualified.

But in documents filed with the Court of Queen's Bench of Alberta, the Tlicho claim the lawsuit is "totally inappropriate," "frivolous," and "for the sole purpose of attempting to embarrass the Tlicho."

The Tlicho own a 90 per cent share of the Ventures West partnership while Denesoline holds the remaining 10 per cent.

The Fort Saskatchewan-based company was started in 1989 and specializes in fuel transportation in Western Canada and the North.

In documents filed with the Court of Queen's Bench of Alberta, Denesoline claims Tlicho family members were paid "exorbitant salaries" and that's caused the company to "incur significant losses."

However, in its statement of defence, the Tlicho Investment Corporation denies hiring people not fit for high level positions.

"...the persons appointed/hired into positions of management of the Corporations were duly qualified ... and were compensated in accordance with the applicable market conditions," the Tlicho's court documents state.

Denesoline also claims it's owed about $370,000 in dividends for its share of Ventures West.

But the Tlicho says the two groups have an agreement that dividends are only paid out when there is enough profit to do so.

It says paying out dividends would not be in the best interest of Ventures West and would mean the company wouldn't be able to meet its "working capital commitments."

Denesoline is also asking a judge to order the Tlicho to buy Denesoline out of the partnership.

The Tlicho claims the entire lawsuit is simply a way for Denesoline to "embarrass" the Tlicho into buying them out.